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| ‘Our Industry Will Fail’: Retail Leaders Ask for Emergency Aid | ‘Our Industry Will Fail’: Retail Leaders Ask for Emergency Aid |
| (3 days later) | |
| Over the past five days, executives from the largest American clothing brands and department stores have been engaged in urgent late-night phone calls and marathon video conferences in which they game out scenarios for their future in a world with a coronavirus pandemic. | Over the past five days, executives from the largest American clothing brands and department stores have been engaged in urgent late-night phone calls and marathon video conferences in which they game out scenarios for their future in a world with a coronavirus pandemic. |
| In the end, they have decided to request a stimulus package from the United States government that would defray the worst of the effects for both big and small businesses alike, framing it as a “bridge,” not a “bailout.” | In the end, they have decided to request a stimulus package from the United States government that would defray the worst of the effects for both big and small businesses alike, framing it as a “bridge,” not a “bailout.” |
| The discussion of coming economic carnage as municipal and federal shutdowns have changed lives and businesses has primarily focused on the airlines and the cruise ships, on restaurants and hotels. | The discussion of coming economic carnage as municipal and federal shutdowns have changed lives and businesses has primarily focused on the airlines and the cruise ships, on restaurants and hotels. |
| But the larger American retail industry and its associated industries represent 52 million jobs — one in four of all workers — and almost $4 trillion worth of gross domestic product, according to data from the National Retail Federation. | But the larger American retail industry and its associated industries represent 52 million jobs — one in four of all workers — and almost $4 trillion worth of gross domestic product, according to data from the National Retail Federation. |
| “There will be tens of millions of job losses in the industry,” said Sonia Syngal, the chief executive of Gap Inc., which includes Old Navy, Banana Republic and Athleta. “People don’t understand how deeply fashion — which is often seen as nonessential — is connected to the U.S. economy.” Gap Inc. has 80,000 employees nationwide working in stores alone. | “There will be tens of millions of job losses in the industry,” said Sonia Syngal, the chief executive of Gap Inc., which includes Old Navy, Banana Republic and Athleta. “People don’t understand how deeply fashion — which is often seen as nonessential — is connected to the U.S. economy.” Gap Inc. has 80,000 employees nationwide working in stores alone. |
| Without immediate relief, said Tory Burch, the founder and co-chief executive of an eponymous brand that employs 4,000 people in the United States, “our industry will fail.” | Without immediate relief, said Tory Burch, the founder and co-chief executive of an eponymous brand that employs 4,000 people in the United States, “our industry will fail.” |
| “I don’t understand why no one is talking about this,” said Stephen Smith, the chief executive of L.L. Bean, which has 5,000 full-time employees in the United States. | “I don’t understand why no one is talking about this,” said Stephen Smith, the chief executive of L.L. Bean, which has 5,000 full-time employees in the United States. |
| Though many clothing brands report they have publicly committed to paying all employees and continuing their medical benefits for the initial two-week period for which most stores are expected to be closed, that time frame ends in early April. No one realistically expects the situation to have changed by then. | Though many clothing brands report they have publicly committed to paying all employees and continuing their medical benefits for the initial two-week period for which most stores are expected to be closed, that time frame ends in early April. No one realistically expects the situation to have changed by then. |
| Mr. Smith said L.L. Bean had “modeled out countless different scenarios” until the company ultimately settled on “bad, worse and worst.” | Mr. Smith said L.L. Bean had “modeled out countless different scenarios” until the company ultimately settled on “bad, worse and worst.” |
| John Idol, chief executive of Capri Holdings, which owns Michael Kors, Jimmy Choo and Versace and has 9,000 employees in the United States, said that, of the scenarios his company had examined, a realistic, not alarmist industry assessment still saw “north of 10 million people who will be unemployed.” | John Idol, chief executive of Capri Holdings, which owns Michael Kors, Jimmy Choo and Versace and has 9,000 employees in the United States, said that, of the scenarios his company had examined, a realistic, not alarmist industry assessment still saw “north of 10 million people who will be unemployed.” |
| “Taking China as a model, it’s likely nothing will reopen until between 30 to 60 days from now,” Mr. Idol said. “It will be approximately a year before business gets somewhat back to normal — and it won’t be the normal we are used to; it will be a new normal. Many companies won’t make it through.” | “Taking China as a model, it’s likely nothing will reopen until between 30 to 60 days from now,” Mr. Idol said. “It will be approximately a year before business gets somewhat back to normal — and it won’t be the normal we are used to; it will be a new normal. Many companies won’t make it through.” |
| The result will be a domino effect. It begins with just the stores that are closed and their employees, which then hurts the brands whose clothes they sell — in fact, many are already hurting from canceled wholesale orders. Then come the factories that produce the clothes for those brands, and the mills that spin the fabric, and even the farmers that produce the raw materials. Spillover includes the ads that will be pulled from glossy magazines, the landlords without tenants, logistics companies and transporters who will lose their clients. | The result will be a domino effect. It begins with just the stores that are closed and their employees, which then hurts the brands whose clothes they sell — in fact, many are already hurting from canceled wholesale orders. Then come the factories that produce the clothes for those brands, and the mills that spin the fabric, and even the farmers that produce the raw materials. Spillover includes the ads that will be pulled from glossy magazines, the landlords without tenants, logistics companies and transporters who will lose their clients. |
| “It will come to a point where there will be pressure on cash flow even for a company of our size, with what I thought was a fortress balance sheet,” said Emanuel Chirico, the chief executive of PVH, which owns Calvin Klein and Tommy Hilfiger, among other brands, and employs approximately 20,000 people in the United States. | “It will come to a point where there will be pressure on cash flow even for a company of our size, with what I thought was a fortress balance sheet,” said Emanuel Chirico, the chief executive of PVH, which owns Calvin Klein and Tommy Hilfiger, among other brands, and employs approximately 20,000 people in the United States. |
| “The formula has always been you create inventory, borrow against the inventory and then sell the inventory,” he said. But when you can’t sell the inventory because no shops are open and no one is buying, the whole chain falls apart. Already, Mr. Chirico said, his stores had accepted their clothing for spring — which is now sitting in darkened rooms. Online, some already have sale prices on new merchandise. (About two-thirds of L.L. Beans sales are online, directly to consumers; Mr. Smith said business was “holding on,” but was still “down 40 percent.”) Either way, the full value of the products will never be recouped. | “The formula has always been you create inventory, borrow against the inventory and then sell the inventory,” he said. But when you can’t sell the inventory because no shops are open and no one is buying, the whole chain falls apart. Already, Mr. Chirico said, his stores had accepted their clothing for spring — which is now sitting in darkened rooms. Online, some already have sale prices on new merchandise. (About two-thirds of L.L. Beans sales are online, directly to consumers; Mr. Smith said business was “holding on,” but was still “down 40 percent.”) Either way, the full value of the products will never be recouped. |
| Many department stores have simply stopped accepting spring orders, sending them directly back to designers without payment, though the designer has already paid the production costs. Small companies are having to consider the possibility of bankruptcy. | Many department stores have simply stopped accepting spring orders, sending them directly back to designers without payment, though the designer has already paid the production costs. Small companies are having to consider the possibility of bankruptcy. |
| “I don’t think anyone would step in if there was an orderly long-term change as people migrate from stores and do more online shopping,” said Jay Sole, a retail analyst at the investment bank UBS. “But if we’re going to a very fast disorderly change in the retail landscape, I think some of these retailers could be deemed too big to fail.” | “I don’t think anyone would step in if there was an orderly long-term change as people migrate from stores and do more online shopping,” said Jay Sole, a retail analyst at the investment bank UBS. “But if we’re going to a very fast disorderly change in the retail landscape, I think some of these retailers could be deemed too big to fail.” |
| It began on Wednesday, when the Council of Fashion Designers of America contacted Ms. Burch and asked her to lead the initiative. The American Apparel and Footwear Association was already on board. Ms. Burch in turn contacted over 20 executives to create a working group, including executives from Ralph Lauren, Nordstrom, Saks and Tom Ford International. The next day, the National Retail Federation, an advocacy group for more than a century, came on board. Mr. Smith said he had “never seen anything like” the coordination taking place across the industry. During multiple group chats, three targets were agreed upon. | It began on Wednesday, when the Council of Fashion Designers of America contacted Ms. Burch and asked her to lead the initiative. The American Apparel and Footwear Association was already on board. Ms. Burch in turn contacted over 20 executives to create a working group, including executives from Ralph Lauren, Nordstrom, Saks and Tom Ford International. The next day, the National Retail Federation, an advocacy group for more than a century, came on board. Mr. Smith said he had “never seen anything like” the coordination taking place across the industry. During multiple group chats, three targets were agreed upon. |
| Updated June 12, 2020 | Updated June 12, 2020 |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| First, they would ask for financing loans for real estate companies, so brands and department stores could have their rent forgiven until they could reopen. Second, they would ask for grants that cover at least 80 percent of employee salaries if they were kept on payroll. And finally, they would request tariff and duty relief for the next 12 months. | First, they would ask for financing loans for real estate companies, so brands and department stores could have their rent forgiven until they could reopen. Second, they would ask for grants that cover at least 80 percent of employee salaries if they were kept on payroll. And finally, they would request tariff and duty relief for the next 12 months. |
| “Retail after the tariffs was already struggling,” said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology. “You’ve taken a weakened industry and you’re weakening it even further. I’m apolitical but overall, we haven’t seen the support we’ve needed for U.S. retail from the U.S. government.” | “Retail after the tariffs was already struggling,” said Deborah Weinswig, founder of Coresight Research, an advisory and research firm that specializes in retail and technology. “You’ve taken a weakened industry and you’re weakening it even further. I’m apolitical but overall, we haven’t seen the support we’ve needed for U.S. retail from the U.S. government.” |
| “I’m worried that we come out of this with fewer retailers, and those that survive don’t always have the consumer’s best interests at heart,” she said. | “I’m worried that we come out of this with fewer retailers, and those that survive don’t always have the consumer’s best interests at heart,” she said. |
| Though most of these forms of relief would apply to larger businesses with fixed costs of stores as well as overseas production, they should also affect smaller businesses — the tiny, designer-led names in the garment district — who would benefit from credit loans to continue paying employees, as well as relief on import taxes. | Though most of these forms of relief would apply to larger businesses with fixed costs of stores as well as overseas production, they should also affect smaller businesses — the tiny, designer-led names in the garment district — who would benefit from credit loans to continue paying employees, as well as relief on import taxes. |
| On Friday, Ms. Burch spoke to Steven Mnuchin, the secretary of the Treasury, and Kevin McCarthy, the House minority leader and a Republican from California. On Saturday, Anna Wintour, the artistic director of Condé Nast and a leading advocate for the industry, contacted Senators Kirsten Gillibrand and Chuck Schumer, both Democrats of New York, and Speaker Nancy Pelosi of California. | On Friday, Ms. Burch spoke to Steven Mnuchin, the secretary of the Treasury, and Kevin McCarthy, the House minority leader and a Republican from California. On Saturday, Anna Wintour, the artistic director of Condé Nast and a leading advocate for the industry, contacted Senators Kirsten Gillibrand and Chuck Schumer, both Democrats of New York, and Speaker Nancy Pelosi of California. |
| “These industries support millions of workers across the country and in New York,” said Ms. Gillibrand in an email. “This economic package must put these workers first, providing them with paid sick and family leave, expanded unemployment insurance and strong protections. Doing so will strengthen workers in every state across the country.” | “These industries support millions of workers across the country and in New York,” said Ms. Gillibrand in an email. “This economic package must put these workers first, providing them with paid sick and family leave, expanded unemployment insurance and strong protections. Doing so will strengthen workers in every state across the country.” |
| In a letter sent to President Trump over the weekend, 90 different trade and retail organizations laid out the potential immediate losses and their belief that “the biggest single issue facing the industry right now is liquidity.” It also underscored their concern about being overlooked. | In a letter sent to President Trump over the weekend, 90 different trade and retail organizations laid out the potential immediate losses and their belief that “the biggest single issue facing the industry right now is liquidity.” It also underscored their concern about being overlooked. |
| “The economic stimulus packages that are being considered must address the concerns of all different kinds and sizes of retail business, including their suppliers,” they wrote. “While some retail businesses may be considered ‘essential’ and may be able to remain open, many will not.” | “The economic stimulus packages that are being considered must address the concerns of all different kinds and sizes of retail business, including their suppliers,” they wrote. “While some retail businesses may be considered ‘essential’ and may be able to remain open, many will not.” |